top up loan​

Editorial Team: One Touch Finance

What the RBI says about top-up loans

The 50% rule for your monthly payments

Here’s what matters for you: the RBI now caps how much you can spend on all your monthly loan payments. You can’t go over 50% of your monthly income for all your EMIs combined. So if you make ₹1 lakh a month, you can spend at most ₹50,000 on loan payments total.

No more prepayment penalties (starting January 2026)

Good news if you want to pay off your loan early. The RBI just made a big change effective January 1, 2026. If you have a personal loan, car loan, or education loan, you won’t be charged any penalty for paying it off early. That’s a real win for you.

Banks have to be transparent about charges.

As of May 8, 2025, the RBI is making sure you see everything upfront. Banks and online lending platforms must show you all the offers they can give you. They have to list every lender they work with. All charges must be visible before you apply. No hidden fees.

Personal loans now require more safeguards.

The RBI changed the rules for how banks handle unsecured personal loans. Banks have to keep more money in reserve for every personal loan they give. What does this mean for you? Stricter approvals and more careful checking of your documents.

Getting a top-up on your current loan

If you already have a loan and want to borrow more, here’s what happens. Your lender will only approve a top-up if your current loan is in good standing. They’ll do a fresh credit check every time. You can’t just get a top-up automatically.

What interest rates look like right now

Home loan rates in November 2025

HDFC Bank – You can get a home loan starting at 7.90% per year. They offer different options where your rate is fixed for a few years and then changes to floating.

ICICI Bank – If you have a good credit score, you might get 7.65% per year. For regular customers, rates usually run between 8.75%-9.4% per year for people making up to ₹35 lakh annually. If you’re self-employed, it’s between 8.75%-9.55% per year.

Public sector banks – Bank of Baroda and PNB are some of the cheapest. Both offer rates starting at 7.45% per year.

Important note – If you’re getting a top-up on your home loan, you’ll probably pay the same rate or maybe a bit higher, depending on your credit score and which bank you use.

Personal loan rates in November 2025

The best rates available – Kotak Mahindra Bank gives you the lowest rates at 9.98% per year. HDFC Bank is right behind them at 9.99% per year. IDFC FIRST Bank also offers 9.99% per year.

What you’ll typically see – Most top banks start their personal loan rates around 10.25%-10.50% per year if you have an excellent credit history.

Who can get a top-up loan?

Basic requirements you need to meet

If you want to apply for a top-up loan, here’s what you need:

• You already have a loan that you’ve been paying for at least 12 months
• You’ve never missed or been late on a payment
• Your credit score is 750 or higher (you can get approved with lower, but 750+ gets you better rates)
• You have a steady income that you can prove
• Your current loan is in good standing

Things that help your chances

You’ll have a better shot at approval and lower rates if:

• You have your salary deposited at the same bank
• You have other products with the bank, like savings accounts or investments
• Your credit score is 750 or above
• You still have a long time left on your current loan
• You don’t already owe too much money

Top-up loans versus new loans

What paperwork do you need

For a top-up loan, you’ll submit:

• Your income proof for the last few months
• Bank statements from the last 3 months
• Statements from your current loan for the last 12 months
• Simple ID verification
• A statement about what you need the money for

For a brand new personal loan, you’ll submit:

• Pay slips from the last 3-6 months
• Bank statements from the last 6-12 months
• ID and address proof
• A letter saying where you work
• Your Form 16 or last year’s tax return
• Your full credit report
• Sometimes you need a person to guarantee the loan

How fast can you get the money

Getting a top-up loan typically takes:

• Same day to submit your application
• 1 day to review your documents
• 1 day for the bank to check your details internally
• Same day to 1 day to get approved
• 1 day to get the money
• Total: 2-4 business days

Getting a new personal loan typically takes:

• 1 day to submit your application
• 2-3 days for the bank to verify your documents
• 2-4 days for the bank to check your credit
• 1-2 days to get an approval decision
• 1-2 days to get the money
• Total: 7-12 business days

How much money can you borrow?

Home loan top-ups

You can usually borrow up to 70-85% of what your property is worth today. Then the bank subtracts what you still owe on your home loan. The maximum time you have to pay it back usually matches how long is left on your original home loan.

Personal loan top-ups

You can usually borrow 2-5 times your monthly income. It depends on how well you’ve been paying your current loan. The bank also looks at how much you already owe compared to what you make. You typically have 1-7 years to pay it back.

How much of your income should go to loan payments

Based on what banks and the RBI recommend, here are the safe ranges for you:

• Playing it safe: 30-35% of what you actually take home each month
• Middle ground: 35-45% of your take-home pay each month
• Maximum allowed by RBI: 50% of your take-home pay each month

When a top-up loan makes sense for you

Good reasons to get a top-up

You should think about a top-up loan if you need money for:

• Fixing up or improving your home
• Paying for higher education
• Covering medical emergencies
• Paying off credit card debt or expensive loans you already have
• Expanding a business you already run

When you should skip a top-up

Don’t get a top-up loan if you want to:

• Spend money on lifestyle stuff you don’t really need
• Invest in risky or speculative investments
• Borrow more when you’re already struggling with your current loan payments
• Get a loan during a time when your income is uncertain or might change

What protections do you have as a borrower?

The RBI makes sure banks follow rules to protect you. Here’s what you’re entitled to:

• You get to see all the prices and charges upfront before you agree to anything
• You have a way to complain if something goes wrong
• You won’t pay penalties for paying off your personal loan early (starting January 2026)
• The bank has to report your payments correctly to credit agencies
• You should get a document called a Key Fact Statement that explains everything before you sign

Important updates for 2025

How banks are checking your information now

Banks are being more thorough about checking who you are and where your money comes from. Your bank statements, tax returns, and job verification get checked more carefully. You can’t just get a loan with almost no paperwork anymore.

Why is approval stricter?

Banks have to keep more money set aside for every personal loan they give out. This means they’re being pickier about who they lend to. If you have a steady salaried job, you’ll have an easier time. If you’re self-employed or work as a gig worker, expect more questions and checks.

How this affects you

The main thing you need to know is that banks are being more cautious. Your documents need to be clean and accurate. Your payment history needs to be perfect. Your income needs to be steady and verifiable.

Steps to take before you apply

Get ready 1-2 months before

• Check your credit report for mistakes
• Please verify that your loan payments are up to date
• Keep more money in your bank account
• Don’t apply for any new credit
• Get your documents organized

Right before you apply

• Check if you qualify using online calculators
• Compare interest rates from 3 different banks
• Look at your current loan statements to make sure everything is correct
• Update your information with the bank if anything has  changed
• Figure out exactly how much money you actually need
• Estimate your new monthly payment amount.

Your document checklist

• Payslips for the last three months
• Bank statements from the last 6 months
• Statements from your current loan for 12 months
• Your most recent Form 16 or tax return
• Updated KYC documents (ID, address proof)
• A statement saying what you need the money for
• Property documents (if you’re getting a home loan top-up)

What you should know right now

1. You can’t spend more than 50% of your monthly income on all loan payments combined
2. You won’t get charged for paying off personal loans early starting January 2026
3. Banks are checking everything more carefully than before
4. You can see all charges upfront before you agree to anything
5. Current rates for home loans range from 7.45%-9.55% and personal loans from 9.98%-10.50%
6. If you already have a good relationship with your bank, they’ll approve you faster and give you better rates

Important to remember

This guide has current information as of November 2025, but things do change:

• Interest rates go up and down frequently, so check with your bank directly
• Different banks have different rules, and what they offer varies by your personal credit profile
• Whether you get approved depends on what the bank decides after reviewing your application
• This is general information, not advice made just for you
• For complicated decisions, talk to a real financial advisor

Information verified from:

• Reserve Bank of India official guidelines (2025)
• RBI Prepayment Charges on Loans Directions from July 2, 2025
• RBI Digital Lending Directions from May 8, 2025
• ICICI Bank official rates (November 2025)
• HDFC Bank official rates (2025)
• Current data from verified financial institutions